Managing Customer Relationships

Managing Customer Relationships

Why did I choose this resource?

I chose this resource to study the importance of customer relationships and how to manage them.

What did you learn from it?

I learned the steps and processes of IDIC and how to implement them. I also discovered the best metrics to use to demonstrate measurable results.

Key Knowledge

  • Traits of Relationships
    • Mutuality – pay attention and respond
    • Interactivity – communication
    • Iterative – grows or deteriorates
  • IDIC – four steps of the customer relationship
    • Step 1: Identify
      • Definition – define customer identifier; name, address, phone number, or customer number
      • Collection – gather data; credit card, loyalty card, web contact, or RFID tags
      • Linking – associate individual customer’s data to his or her identifier
      • Integration – data shapes all customer transactions or contacts
      • Recognition – create mechanism to ensure customer is recognized and remembered during every contact
      • Storage – save information in databases
      • Updating – maintain current information
      • Analysis – study customer data in context
      • Availability – access to customer information
      • Security – protect customer data from unauthorized persons
    • Step 2: Differentiate
      • Customers who cost less – higher margin and higher value
      • Customers who use more high-margin products or services – higher value
      • Other metrics include:
        • needs
        • buying patterns
        • lifestyles
        • other relevant characteristics
    • Step 3: Interact
      • Implicit and explicit assumptions
      • Understandings
      • Both parties must:
        • identify themselves
        • participate voluntarily
        • accept the possibility of a change to their approach, understandings, or attitudes
    • Step 4: Customize
      • Four kinds of customization.
        • Adaptive – customer may alter the product
        • Cosmetic – offer color choices or personalization (name or company logo)
        • Collaborative – company communicates with client to create precise products for the clients specific needs
        • Transparent – provide unique products for a client without overtly stating the products are specialized.
  • Metrics and Measurements
    • Customer equity – total lifetime value of a customer or of all customers
      • Comprised of:
        • Value equity – worth of the product or service to the customer
        • Relationship equity – the tendency of the customer to stay with the brand
      • Financial Value
        • Cross-selling opportunities
        • Lower costs
        • Lower attrition
        • Quicker cycle times

How are you using what you learned?

I am using what I learned to evaluate our customer relationships and make changes or improvements where necessary.

Key Changes / Key Actions

  • Evaluate each customers relationship with Anant
  • Use IDIC


  • Name : Managing Customer Relationships
  • Author : Don Peppers and Martha Rogers
  • Link to Book

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